Technical analysis for FTSE 100 for 14th May 2024
The FTSE 100 snapped its six-session winning streak on Monday, hurt by losses in aerospace and defence stocks, while investors awaited more data and comments from Bank of England (BoE) officials on the state of the economy.
The blue-chip FTSE 100 fell 0.2% after hitting record highs in 11 out of last 13 sessions as the BoE took a dovish stance. The mid-cap FTSE 250 followed suit, sliding 0.4% while the pound was stronger against the dollar at $1.2557.
Investors' focus will shift to labour market data due on Tuesday and comments later in the week from BoE's chief economist Huw Pill and external member of the monetary policy panel Megan Greene for clues on the timing of the policy easing.
U.S. inflation data, due on Wednesday, will also be on the radar for more pointers to the Federal Reserve's interest-rate path.
Asia
Asian shares hovered around 15-month highs on Tuesday and the dollar was firm ahead of highly anticipated U.S. inflation data, while Japanese bonds were squeezed as the central bank pulled back a little on its bond buying programme.
MSCI's broadest index of Asia-Pacific shares outside Japan climbed slightly and hit its highest since early 2023 in morning trade, as a strong rally in Hong Kong shares extended into a fourth consecutive week.
Japan's Nikkei was flat. Benchmark 10-year Japanese government bond yields rose one basis point to 0.95%, the highest yield since November, and five-year Japanese yields hit 0.555%, the highest since 2011.
World stocks and the S&P 500 were steady overnight, poised just below record peaks. A survey released on Monday by the New York Fed showed Americans see inflation a year from now at 3.3%, higher than they did a month earlier, and later on Tuesday U.S. producer price figures will be closely watched.
Day ahead
British labour numbers, German sentiment, U.S. producer prices, an appearance from Jerome Powell and earnings releases due through Tuesday take a back seat to Wednesday's CPI figure.
As in 2021, it's expected to begin with a 3 and markets are trying to guess whether signs of inflation picking up were a blip or a trend. A downside surprise is likely to loosen the shackles on stock rallies in Hong Kong, London and New York.
FTSE 100 technical analysis for today, 14th May 2024
Bit of a bear Monday in the end yesterday as the bears drove it down off the Hull MA resistance at the 8450 level. That said, it's managed to hold onto 8400 as the 8395 support area has held overnight, and we may well see an initial kick up to start with towards the daily pivot at the 8420 level.
If the bears try again here then a slide down towards the 8367 level may well materialise today, and with S2 and the key fib here, I would like to see a climb back above the 8400 level.
The 8450 level remains the line in the sand that needs to be broken for more upside towards the 8515 daily resistance area, and with the Raff channels continuing to head up, we may well see a continuation of the "buy the dip".
Should we manage to reach the 8510-8515 area then a short here is worth a go later today.
The S&P500 bulls will be keen to defend the 5200 level as well which may well provide some upside support.
Other resistance levels to keep an eye on above the 8450 level are 8470 R2, and 8492 R3. We are just starting the day below the bottom of the 10d Raff channel so the bulls will certainly be keen to get the price back above the bottom of that channel which is at 8420. Will the bears or the bulls win at this level?!
Below the 8367 level then the bears will be aiming for the 8337 S3 level next and a move below that for the 8300 round number. I don't expect it to get that low and ideally we see a defence of the 8365 area if it gets that low today.
The main news driver for the week will be US inflation data out tomorrow, whilst we have yet another Powell speech later on today, at 15:00. 1330 also sees the release of the US Producer Price Inflation for April, forecasted at 0.3%.
Good luck today.
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